Karur Vysya Bank Q2 net profit jumps 81% to Rs 115 crore

Private sector Karur Vysya Bank (KVB) on Friday reported an 81.4 percent jump in its net profit at Rs 114.89 crore in the second quarter of FY 2020-21, helped by lower provisioning for bad loans.

The south-based lender had posted a net profit of Rs 63.33 crore in the corresponding three months a year ago.

Total income though fell to Rs 1,666.26 crore in the July-September period of FY21 as against Rs 1,815.24 crore in the same quarter of 2019-20, KVB said in a regulatory filing.

Interest income was down 9.3 percent at Rs 1,394.70 crore from Rs 1,537.51 crore.

The bank witnessed improvement in its asset quality with the gross non-performing assets (NPAs) falling to 7.93 percent of the gross advances at end September 2020 from 8.89 percent a year ago.

In value terms, the gross NPAs or bad loans were down at Rs 3,998.43 crore as against Rs 4,391.03 crore.

Net NPAs improved to 2.99 percent (Rs 1,428.20 crore) from 4.50 percent (Rs 2,118.35 crore).

Thus, the provisions for bad loans and contingencies for Q2FY21 was brought down at Rs 284.73 crore from Rs 365.17 crore reserved a year ago.

On the COVID-19 pandemic, the bank said it is closely monitoring the day-to-day operations, business and liquidity position as well as adequacy capital.

"As a matter of prudence, the bank has made an additional provision of Rs 95.28 crore during the current quarter and the aggregate provision against the likely impact of COVID-19 stands at Rs 215.29 crore as on September 30, 2020, inclusive of RBI mandated provision,” KVB said.

With regard to accounts which were not declared NPAs till August 2020, as per Supreme Court order, the lender said it has made an additional provision of Rs 4.72 crore against such accounts, as a matter of prudence.

Provision coverage ratio at the end of second quarter of this fiscal stood at 75.19 percent (previous year 61.82 percent).